Can a Company Force You to Resign for Refusing a Transfer Mentioned in Your Contract?

Dear All Seniors,

I would like to know if a company can ask an employee to resign or take action against an employee who refused the transfer from one branch to another branch, even if it is mentioned in the Appointment Letter.

Kindly revert. I need a reply on an urgent basis.

Thanks & regards,
Meera

Hi,

Please mention the transfer or deputation clause which is already mentioned in the appointment letter in the transfer letter. Kindly issue the transfer letter if it has not been received, and then send it to the postal address before taking any action.

Thank you.

Transfer Clause and Employee Compliance

If the appointment letter includes a transfer clause, then the employee is obliged to accept the posting. Failing to do so amounts to disobedience of orders, warranting action. Having said this, I advise you to resolve such issues on a win-win basis, as the concerned employee may consider resignation or may cease coming to the office. Please inquire why the employee is reluctant to go to the new place of posting and whether the issue can be addressed within the framework of your policies or discretion.

Regards,
B. Saikumar
HR & Labour Law Advisor
Navi Mumbai

Employee Transfer and Resignation Queries

We have gone to Goa and personally communicated with our employees about the transfer. We informed them that when they shift to Mumbai, the company will provide them with a travel allowance and a 3-5 day stay in a hotel so that they can search for rental housing or a PG. If more employees are willing to join us, the company can consider providing them with accommodation as well.

The employees agreed initially, but the Manager discouraged them from signing the Transfer Letters, leading to all employees refusing to sign. I would like to know if the company can ask them to resign if they can't move to Mumbai and the process has already been shifted here. What would be the next action the company should take? Is the company liable to pay one month's extra salary to them even if they have intentionally slowed down the business and have not contributed to the business this whole month?

Please reply. I need your assistance on an urgent basis.

Thanks & regards,

Meera

Also, can the company sue them for breach of contract as the transfer clause is mentioned in their appointment letters, and they have agreed to and signed it but are now refusing to get transferred?

Please guide.

Thanks & regards,
Meera

Addressing Industrial Relations Issues

This may take the form of an industrial relations issue. What I understand is that the transfers are not in the natural course of administrative need but out of the compulsion of shifting the employees from Goa to Mumbai, and probably you would be closing the branch there. If you blame the employees for slowing down the work, you also have your share of blame in not paying salaries to the employees for having worked. Then how do you defend your action? This is an industrial relations issue. Try to solve it amicably by talking to them across the table and exploring various peaceful options, including offering the choice of resignation to willing employees, instead of rushing to do something hasty that may lead to an industrial dispute.

Regards, B. Saikumar

We have paid the salaries, but they were delayed by 7-8 days. We moved the process here for ease of business so that they can be monitored and guided properly for improvement. Additionally, as they have slowed down the business and the company is not earning a sufficient amount to pay salaries, transportation, electricity, rent, etc., at least we can save on operational costs. Instead of shutting down, we have given them the opportunity to come and join us in Mumbai so that their employment can continue.

However, they have refused the transfer. I would like guidance on what the next step the company should take.

Kindly reply.

Thanks & regards,
Meera

Addressing Employee Transfer and Salary Payment Issues

The issue of delay in salary payment and the action of resorting to a strike by Goa employees is now resolved. The law provides punishment for erring employees if any lawful order is not complied with. As a business strategy, if the Goa operation is not viable, what can you do with the office, assets, and staff there? The employment terms/service rules must have a transfer clause as well. Please check and issue a transfer letter citing the reference of the said written clause. Before transferring personnel, you should carefully conduct strategic planning and then act on the transfer.

Whether the operation in Goa is to be closed permanently or it is a temporary phase, if your management needs some time to make an assessment using the wait-and-watch formula for a few months, your management should not transfer and unnecessarily disturb employees, inviting industrial relation problems. If you do so, employees will approach the labour court, tribunal, or labour department. Suppose a dispute is ongoing during the pendency of any industrial dispute before the court, tribunal, or labour conciliation. In that case, you cannot change service conditions without prior approval from the respective authority where the dispute has been pending. That is a restriction that takes a route and time as well.

Regards, RDS Yadav

Thank you for your guidance. The transfer clause is mentioned in the appointment letters of employees, which they have accepted and signed. We moved the process here for ease of business so that they can be monitored and guided properly for improvement. Also, as they have slowed down the business and the company is not earning a sufficient amount to pay salaries, transportation, electricity, rent, etc., at least we can save on operational costs. So, instead of shutting down, we have given them the opportunity to come and join us in Mumbai so that their employment can continue.

The company is ready to provide them accommodation, and travelling expenses for coming here would be borne by the company. However, employees have refused to get transferred and are not resigning but telling us to terminate them. I need your guidance on what should be done in this situation.

Thanks & regards,
Meera